How will a firm's cash cycle be affected if one of the firm's suppliers that was only accepting cash payment before, now offers a trade credit to the firm, all else being equal (select the best choice below)? 1. If one of the firm's suppliers that was only accepting cash payment before, now offers a trade credit to the firm, its accounts payable days will increase. All else equal, this will cause the cash cycle of the firm to decrease. II. If one of the firm's suppliers that was only accepting cash payment before, now offers a trade credit to the firm, its accounts receivable days will increase. All else equal, this will cause the cash cycle of the firm to increase. III. If one of the firm's suppliers that was only accepting cash payment before, now offers a trade credit to the firm, its accounts payable days will decrease. All else equal, this will cause the cash cycle of the firm. to decrease. IV. If one of the firm's suppliers that was only accepting cash payment before, now offers a trade credit to the firm, its accounts payable days will increase. All else equal, this will cause the cash cycle of the firm to increase. O a. I and II O b. I and III O c. II and III Od. Only I e. Only II.

How will a firm's cash cycle be affected if one of the firm's suppliers that was only accepting cash payment before, now offers a trade credit to the firm, all else being equal (select the best choice below)? 1. If one of the firm's suppliers that was only accepting cash payment before, now offers a trade credit to the firm, its accounts payable days will increase. All else equal, this will cause the cash cycle of the firm to decrease. II. If one of the firm's suppliers that was only accepting cash payment before, now offers a trade credit to the firm, its accounts receivable days will increase. All else equal, this will cause the cash cycle of the firm to increase. III. If one of the firm's suppliers that was only accepting cash payment before, now offers a trade credit to the firm, its accounts payable days will decrease. All else equal, this will cause the cash cycle of the firm. to decrease. IV. If one of the firm's suppliers that was only accepting cash payment before, now offers a trade credit to the firm, its accounts payable days will increase. All else equal, this will cause the cash cycle of the firm to increase. O a. I and II O b. I and III O c. II and III Od. Only I e. Only II.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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If we hold all other factors the same, an increase in interest rates will: a. Decrease the present value of a stream of constant payments we expect to receive. b. Increase the present value of a stream of constant payments we expect to receive. c. Decrease the interest revenue that a company will earn on its funds that it holds in its interest-bearing checking account. d. No impact on how much a company should be willing to pay for factory equipment that is expected to significantly reduce the factory electricity costs.
What are some tools that companies have to manage their (net operating) working capital? Provide examples of inventory and receivables management techniques. What is the Cash Conversion Cycle and why is this a useful metric? Are there risks if this is too low?
Which of the following statements is FALSE?i. Using the payback rule, you can calculate how much profits are earned over the investment period.ii. The IRR is sensitive to the timing of the cash flows.iii. Shareholders have the first claim on the cash flows of the company.
QUESTION 1 In a forfaiting transaction, the forfait buys the notes at a discount from face value from the importer. buys the notes at a discount from face value from the exporter. redeems the notes at a face value to the exporter. Onone of the options QUESTION 2 Depending on the manner in which firms are affected, political risk can be operational and control risk only transfer, operational, and control risk operational and transfer risk only. transfer and operational risk only Click Save and Submit to save and submit. Chick See All Am O Ht red
Arbitrage is the practice of making money by simultaneously buying in one market and selling in another. It takes advantage of price differences between the two or more markets. Give an example and explain how is this possible. Give enough detail that we can understand the basics of the transaction.
13. A short-term creditor would be interested in A. profitability ratio. B. efficiency ratio. C. liquidity ratio. D. leverage ratio. The quick ratio of a firm would be unaffected by which of the following? 14. A. Land held for investment is sold for cash. B. Equipment is purchased, financed by a long-term debt issue. C. Inventories are sold for cash D. Inventories are sold on a credit basis.
A firm wants to reduce its cash conversion cycle sharply. Which of the following actions should it take? a. The company increases its average inventory without increasing its sales. b. The company increases its DSO (days sales outstanding). c. The company increases its average accounts payable without reducing its sales. d. The company sells an issue of long-term bonds and uses the proceeds to buy back some of its common stock.
A decrease in the costs of using an ATM causes money demand to increase. Shifting the Money demand curve to the right.Group of answer choices A. The first statement is false. The second statement is true. B. The first and second statements are both false. C. The first statement is true. The second statement is false. D. The first and second statements are both true.
one way to improve a companys cash conversion cycle is to increase its days sales outstanding true or false???
Several factors affect a firm’s need for external funds. Evaluate the effect of each following factor and place a check next to each factor that is likely to increase a firm’s need for external capital—that is, its AFN (additional funds needed). Check all that apply. The firm increases its dividend payout ratio. The firm switches its supplier for the majority of its raw materials. The new supplier offers less favorable credit terms and thus reduces the trade credit available to the firm, resulting in a reduction in accounts payable. The firm improves its production system and increases its profit margin. Accounts payable and accrued liabilities represent obligations that the firm must pay off. Assuming everything else holds constant, if they increase, the firm’s AFN will_________ .
Which of the following is false? a. Baumol model helps firm to find out their desirable level of cash balance under certainty b. Any presence of a cash buffer affects the cost of holding cash and ultimately the annual cost of cash for a particular firm c. A higher average daily disbursement float than average daily collection float is more desirable for a firm d. Accounts payable increase the number of days a firm’s resources are tied up in the operating cycle
Which of the following is the most correct? A. In reference to the time value of money, the present value is always labeled as t=1 B. Negative MVAs indicate that a company's executives are managing the expenses well C. Nominal rates, or annual percentage rates, always equal the effective annual rate D. A strong ROE always indicates a strong year for a company E. Firms should generally try to minimize their days' sales outstanding in order to access their receivables at fast rates.

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